DKS Q1 Earnings Meet Estimates, Comparable Sales Jump 4.5%

Core Insights - DICK'S Sporting Goods, Inc. (DKS) reported first-quarter fiscal 2025 results with net sales of $3.18 billion, a 5.2% increase year over year, surpassing the consensus estimate of $3.12 billion, driven by strong comparable sales and transaction growth [2][4] - Adjusted earnings per share (EPS) were $3.37, a 2% increase from the previous year's $3.30, matching the Zacks Consensus Estimate [1][4] - The company has entered into a definitive merger agreement to acquire Foot Locker, Inc. for an enterprise value of approximately $2.5 billion, expected to be accretive to EPS in the first fiscal year post-close [8][10] Financial Performance - Gross profit increased by 6.8% year over year to $1.17 billion, exceeding the estimate of $1.14 billion, with gross margin expanding by 41 basis points to 36.7% [4] - Consolidated comparable sales grew by 4.5% year over year, supported by a 3.7% rise in average ticket and a 0.8% increase in transactions [3][4] - The company ended the fiscal first quarter with cash and cash equivalents of $1.04 billion and total debt of $1.5 billion [5][6] Strategic Initiatives - DKS repurchased 1.4 million shares for $299 million during the quarter, with $212.9 million remaining under its share repurchase authorization [6] - The company paid quarterly dividends of $100 million and announced a quarterly cash dividend of $1.2125 per share [7] - DKS plans to open nearly 16 Field House locations in fiscal 2025, with two House of Sport locations and four DICK'S Field House locations introduced in the first quarter [7][14] Future Outlook - Management reaffirmed sales guidance for fiscal 2025, projecting net sales between $13.6 billion and $13.9 billion, with comparable sales growth expected to be between 1% and 3% [10][11] - The company anticipates adjusted EPS to be in the range of $13.80 to $14.40, reflecting potential impacts from tariffs [12][13] - DKS forecasts operating margin to be approximately 11.1% at the midpoint, with capital expenditures planned at about $1 billion for the year [14]